DC City Council passes law legitimizing Uber car service

City carves out new "digital dispatch" category for smartphone car services.

Uber, the smartphone-based car service that has been shaking up taxicab and limosine markets around the country, scored a big victory on Tuesday as the DC City Council passed legislation that officially recognizes "digital dispatch" car services. The new law comes just months after Uber rallied to defeat legislation that the firm said was designed to hobble Uber in order to shield incumbent taxcab operators from competition.

The new legislation "not only improves transportation in the District, but also serves as an innovative model for city transportation legislation across the country," wrote Travis Kalanick, Uber's CEO, in a triumphant blog post. Uber singled out Councilmember Mary Cheh, the lead sponsor of the legislation, for being "tireless in her efforts to craft a pro-innovation, pro-rider piece of legislation." Just months before, Uber had blasted Cheh's earlier proposal, which would have required "sedan" services like Uber to charge at least 5 times the minimum taxi rate, effectively pricing Uber out of the taxicab market.

That proposal prompted a backlash from Uber's loyal customers and drivers, and Cheh shelved the legislation. Uber then sat down with Cheh and negotiated a new version of the legislation that Uber was willing to endorse.

According to DCist, "Uber's pricing model will not be regulated, though its drivers will be required to submit trip data back to the DC Taxicab Commission, and the company will have to better inform its customers that drivers are rating them just as much as riders review drivers." It also combines the application process for taxicabs, sedans and limosines.

While Uber is now on firm legal footing in DC, it is still facing legal challenges elsewhere in the country. Recently Uber has been crossing swords with regulators in Chicago. In California, Uber and some other transportation startups were recently slapped with $20,000 fines for violating regulations in the Golden State. Officials are currently considering updates to California regulations that could legitimize Uber and other services like it.